Nowhere to Hide in 2018

January 04, 2019 | Derek Schmidt, CFA, CAIA, Senior Research Analyst, Private Equity

As we enter 2019, we look back on what was a pretty poor year for investors. There was just nowhere to hide in 2018 as a volatile 4th quarter turned all major indices negative. The downward catalyst occurred when Federal Reserve Chair Jerome Powell said interest rates were “a long way” from what he considered neither stimulative nor restrictive.

For the year, the S&P 500 lost 4.4%, the Russell 2000 lost 11%, and emerging markets (as measured by the MSCI EM index) lost 14.6%. These losses came mostly as volatility spiked with the CBOE Volatility Index up 132% in 2018. Strong market fundamentals have largely been overshadowed by fear as global growth concerns, trade, and rising interest rate worries continue to pressure markets. This broad market correction has been historically unusual, but years with broadly poor returns from a majority of indices are typically followed by a positive year as investors find value in market opportunities.

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The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

 

Derek Schmidt, CFA, CAIA
Senior Research Analyst, Private Equity

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